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E-Rate Reform at Hand as FCC Pledges $2 Billion More for Wireless Broadband

By Dian Schaffhauser

02/04/14

The Federal Communications Commission has gone public with plans to "reprioritize" existing E-rate funds over the next two years in order to invest an additional $2 billion toward putting broadband and wireless networks into 15,000 schools representing 20 million students. The news comes at the same time as an announcement from the White House that three major telecommunications service providers are committing $100 million each to providing broadband and wireless access and related services to schools and students over the next three to four years.

President Obama, speaking from Maryland's Buck Lodge Middle School earlier this week, noted that the FCC decision "won't require a single piece of legislation from Congress. It won't add a single dime to the deficit."

FCC Chairman Tom Wheeler called the investment a "down-payment on the goal of 99 percent of America's students having high-speed Internet connections within five years." That's the goal set by Obama's ConnectED education initiative, announced last summer. ConnectED seeks to outfit almost every classroom in the country with high-speed bandwidth and ample educational technology, including a laptop for every student in grades 3 through 12.

"As we consider long-term improvements to the program, we will take immediate steps to make existing funds go farther, significantly increasing our investment in high-speed Internet to help connect millions of students to the digital age," he added.

Wheeler gave a talk today at the Library of Congress to open Digital Learning Day, a mostly-online event that highlights the use of digital learning in the classroom. In his speech, he emphasized that no issue is more important during his tenure as FCC Chairman than "making sure our schools and libraries are connected to high-speed broadband networks." That is why, he said, that E-rate modernization is "at the top of my agenda and why I support President Obama's goal of connecting 99 percent of all students to high-speed broadband capacity in five years — or faster."

Although details are sketchy, the FCC intends to fund new investments through a combination of moves: reprioritizing existing E-rate funds to focus on high-capacity Internet connectivity and modernizing management of the E-rate program. "We will take a business-like approach to the management of the program, identifying opportunities to improve the ways funds are deployed and streamlining the process for schools and libraries," Wheeler explained.

E-rate provides $2.4 billion each year to public schools and libraries for communications services. Under the new action, the FCC will target additional support to the most "urgent Internet upgrade needs." Currently, only about half of E-rate funds go to broadband. By regulation other funds are spent on phone service, e-mail, Web hosting and similar non-broadband needs.

"I was recently at one middle school where the students told about how the network would crash if too many of them pushed 'Enter' simultaneously," Wheeler recalled. "They told of having to walk around the room holding their tablets up until they got a WiFi signal."

"When 80 percent of teachers and administrators in schools participating in the E-rate program say they do not have the bandwidth necessary to meet their educational needs, we have a problem that must be fixed," Wheeler stated. "When roughly half the E-rate schools access the Internet at speeds that are slower than what many Americans have in their homes — and try to serve hundreds of students — we have a crisis that undermines our nation's future."

The FCC said it expects to streamline the application process and provide more assistance to schools and libraries to help them lower the prices they pay. The agency will also increase governance of its program "to ensure every dollar that is intended to reach a school or library gets there."

Rather than fixating on pursuing an increase in funds, Wheeler suggested that the biggest immediate opportunities could be "unlocked by first looking carefully at how to do better with what you already have."

An agency review has found "significant improvements" that could be made to the way funds are deployed, he noted. For example, the current program "penalizes" schools that apply for funding with other schools because their applications tend to be more complex. This in spite of the fact that there are benefits to being part of a consortia, which "tend to get better prices for equipment and services by buying in bulk." Henceforth, Wheeler said, "They will be prioritized. We can start fixing that immediately."

Wheeler added that the agency will also do what it can to improve the efficiency of how it treats "old applications — appeals, holds and other outstanding requests."

These kinds of changes are to be put in place by the end of March, Wheeler said. At the same time, he expected to issue "an order" later this spring that would go into effect in 2015 to restructure the program to target high capacity connection and high-speed WiFi funding requests and phase out legacy services. His goal is to have this part of the process in place before students return to school in fall 2014.

These are the some of the same initiatives that have been promoted by other entities with an interest in the E-rate program, including Education SuperHighway, a San Francisco-based non-profit advocating getting Internet infrastructure into every K-12 public school in the country. The organization's "Smarter E-rate" program has called for a shift away from legacy technologies to broadband and the creation of a one-time capital investment fund for connecting schools and libraries to fiber and classrooms to WiFi.

School people tuning into Wheeler's talk online added their own perspective. "My dream for simplifying E-rate would be to have the phone companies give an automatic fixed 70 percent (or 80/90 percent) discount to all schools & libraries on all phone lines, circuits and ISP services and bill it directly to E-rate," wrote one participant. "No paperwork or applications required."

"E-rate needs to expand to include WiFi," suggested another.

Not everybody was pleased by Wheeler's lack of apparent commitment to increased funding for E-rate. "For the past two years, E-rate demand has been at or above $5 billion, but the cap of $2.25 billion remains largely unchanged," said Brian Lewis, CEO for the International Society for Technology in Education (ISTE). "The administration's position that high-speed broadband is essential to enhancing individualization of learning in a connected classroom is spot on. Now, we need to make sure it's attainable for all districts and work toward a permanent increase [in] the annual funding cap."

The E-rate program is administered by the Universal Service Administrative Company under the direction of the FCC. Specifically, USAC is responsible for processing the applications for support, confirming eligibility and reimbursing service providers and eligible schools and libraries for the discounted services. USAC also ensures that the applicants and service providers comply with the E-rate rules and procedures established by the FCC.

About the Author

Dian Schaffhauser is a writer who covers technology and business for a number of publications. Contact her at dian@dischaffhauser.com.

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